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Mixed reaction to billion dollar aged care pledge

ELEANOR HALL: The Federal Government's pledge of more than $1 billion to top up the wages of aged care workers has drawn a mixed reaction from the sector.

To qualify for the funds, providers will have to pay above minimum award wages and have enterprise bargaining agreements.

Aged care workers and the Council on the Ageing are welcoming the move, but one of the peak groups representing providers warns that the new agreements may be too expensive to set up.

From Canberra, Alexandra Kirk reports.

ALEXANDRA KIRK: Last year the Government set aside $1.2 billion of its aged care reform package to help the sector attract staff by improving wages, conditions and career structures.

MARK BUTLER: Aged care workers don't tend to work in the aged care sector for the money, they do it because they love the work. But that in itself has to stop being an excuse for paying such low wages for such important work.

ALEXANDRA KIRK: Today the Minister for Ageing, Mark Butler, has outlined how that will be delivered - via a federal wage supplement.

MARK BUTLER: In order to qualify for this money, aged care providers will have to pay a minimum level of wages to their care staff, to ancillary workers, and to their nurses, wages that will be above the minimum award rates currently set as a legal minimum.

They will also have to pay minimum annual increases to ensure that wages continue to rise in real terms in this sector. Over the course of the four years of this agreement, personal care workers who are currently on minimum awards rates will receive wage increases of around almost 20 per cent over those four years, enrolled nurses 25 per cent and registered nurses almost 30 per cent.

This will go a long way to improving the capacity of the aged care sector to attract and importantly to retain the quality dedicated aged care workers that we need.

ALEXANDRA KIRK: The Minister was accompanied by key members of the sector.

MELANIE O'GORMAN: My name's Melanie O'Gorman (phonetic). I love my job but we need to be paid for the skills that have so we can look after the aged.

ALEXANDRA KIRK: Ian Yates from the Council on the Ageing says it's a good start.

IAN YATES: Do we need more, yes we'll need more, but this is an important first step in seeing that wages in the sector go up. The consumers that we represent, people who use aged care services and their families, regularly tell us that the most vital ingredient in the quality of the care they receive is the quality of the staff.

The staff that they work with, work with them, are committed but the message that we get from consumers is they're not well enough paid and there's not enough of them.

ALEXANDRA KIRK: Mark Butler says the industry too has a part to play too in boosting wages.

MARK BUTLER: Earnings because of funding increases over the last few years have increased by 22 per cent per annum, while employee expenses have only increased by 5 per cent per annum. Now that gap has gone into a significantly increased profitability for the average aged care provider.

ALEXANDRA KIRK: The wages top-up applies from the first of July. Aged care providers have until then to indicate whether they'll be part of the Workforce Compact.

MARK BUTLER: If they get their agreement done by the end of this calendar year, then money is available to back-pay those increases to the 1st of July.

MARTIN LAVERTY: Look the aspiration is terrific and we'd love to be paying nurses 30 per cent more than they current earn today, but the challenge is the Government hasn't provided all of the funds to be able to meet these aspirations.

ALEXANDRA KIRK: So will the sector take the money and deliver enterprise agreements?

MARTIN LAVERTY: Success of the compact will be determined by maths. For some aged care providers they will look at this, they will be able to afford the pay increases and they will be able to commit to the compact.

A good number, and it's particularly smaller providers, although those in regional and rural areas, we're concerned that they won't be able to afford these pay increases. This aspiration of a 30 per cent pay increase for nurses is fantastic. It's also got to be affordable, and to the Government we've simply argued provide the dollars and we'll happily sign up.

ALEXANDRA KIRK: Martin Laverty says those with enterprise agreements already in place will be able to sign up, but he says as many as half don't and cost is a barrier.

MARTIN LAVERTY: One of the new barriers that the Government has perhaps unwittingly created is that our experience in the last year has been that is costs $38,000 to go through the enterprise bargaining agreement process.

It could be that in a few years from now, that very few workers have more money in their pay packets as a result of today's seemingly good announcement.

ALEXANDRA KIRK: And he disagrees with the Government that an enterprise bargaining agreement is necessary to deliver the top-up payment.

MARTIN LAVERTY: Well at the moment there is a contract, the conditional adjustment payment is the mechanism the Government currently uses that passes this money onto providers that then makes its way into the wage packets of staff.

We've seen no problem with that current contract. The Government itself hasn't pointed to a problem with that current contract. Why couldn't that operate in the future?

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